The Mr Green online casino group has agreed to buy rival Evoke Gaming for Euro 7 million in cash, acquiring the latter's debt free assets which include Redbet Casino, Vinnarum Casino, Bertil and Mama Mia Bingo.
Mr Green is acquiring all shares in Evoke Gaming Ltd from Bonnier Growth Media, expects to achieve significant synergies, and intends to expand Redbet in Mr Green's existing and future markets.
The agreement also has an earn-out provision that could see another Euro 1.5 million changing hands if certain targets are achieved.
In a statement Tuesday, Mr Green advised that the acquisition will not have any impact on Mr Green's EBITDA for 2018, although there will be a marginally negative impact on cash flow. The acquisition will contribute positively to Mr Green's EBITDA and cash flow as of 2019. Mr Green expects to achieve synergies of Euro 2.5-3.5 million per year with full effect in 2019.
In 2016, Evoke Gaming's revenue amounted to Euro 15.5 million but EBITDA was down at negative Euro 4.6 million. For the first nine months of 2017, revenue amounted to Euro 7.4 million and EBITDA to Euro negative 4.4 million.
The company reported that in 2017, revenue and earnings were negatively impacted as a result of the migration to a new technology platform and restructuring measures which are expected to be finalised by the time of the completion of the transaction.
Evoke Gaming currently has 82 employees, all of whom work in Malta. Following the relaunch of Redbet and Vinnarum before summer 2017, the sites have demonstrated favourable growth.
Mr Green's financial targets of an annual growth rate of 20 percent and an EBITDA margin of 20 percent by 2019 will be unaffected by the acquisition. At 30 September, Mr Green's net cash amounted to SEK 567.6 million.
Redbet offers sportsbook, casino and poker, and holds a strong position, primarily in Sweden and the U.K. Mr Green believes that Redbet has major potential to grow in parallel with Mr Green and develop into a global brand.
Vinnarum casino commands a solid position in the Nordic region with a high share of returning customers.
Bertil and MamaMia are bingo sites with loyal customers and a strong position in Sweden. Mr Green intends to continue operating Vinnarum casino. Bertil and MamaMia are considered to have the potential for continued expansion, primarily in the Nordic region.
Mr Green CEO Per Norman said Tuesday:
“Evoke Gaming is an ideal fit for our business plan and strategy. We are pursuing our strategy of nurturing a small number of strong brands that can work globally. With Redbet and Mr Green, we have two immensely strong brands addressing different segments, and we see major potential to expand Redbet into our existing markets.”
“Evoke Gaming is on the threshold of a significant turnaround. Mr Green will give us the muscle to continue growing internationally in an effective manner,” Fredrik Staël von Holstein, CEO of Evoke Gaming added..
Fredrik Staël von Holstein will remain as head of Evoke Gaming's operations after the transaction has been completed and will become a member of Mr Green Ltd's management team in Malta.